August 23: Escalation Photograph:( Reuters )
Trade is one aspect of India-US relationship that has the most friction, a senior White House official has said even as he underlined that the Trump Administration is looking for a “free, fair and reciprocal” trade with India.
The US government said that they are focused on increasing the 'strategic partnership' but President Trump has publicly raised the issue of high import duty levied by India on high-end motorcycles at least three times in a month and threatened a reciprocal duty on Indian exports to the US.
“The commitment to the relationship is very strong on both sides. If you had to point to a part of the relationship where you have the most friction, it certainly would be the trade side,” a senior administration official said.
Trump said that they are “getting nothing” from New Delhi’s recent announcement that it had slashed the duty on imported high-end motorcycles to 50%.
Insisting that the Trump Administration has been clear for a free, fair and reciprocal trade, the official said that there has been concerns raised about the trade deficit with India. But he quickly pointed that this trade deficit has actually come down slightly more recently, based largely on India’s imports of US energy. “This administration is looking for a free, fair and reciprocal trade with India. And so is seeking to see some of those tariffs such as on a Harley Davidson motorcycles that are there. The US is determined to find the opportunities to increase trade investment with India and does expect that there will be some sort of reciprocal dealings on the trade issues,” the official said.
The senior administration official noted that Indian motorcycles that are imported into the US don’t have any tariffs on them. “And so the president has been clear that he’s looking for a fairly reciprocal trade with India,” the official said.
India is among a group of countries with whom the United States has a trade deficit. But the $30.8 billion deficit in 2016 is quite low compared to China’s $385 billion, but enough to put it on Trump’s radar, as a country responsible for the combined $800 billion trade deficit he has promised to wipe out.
Responding to a series of question, the official said the Trump Administration has been on constant talks with India on trade issues. Foreign Secretary Vijay Gokhale, who was in Washington DC this week met the US Trade Representative Robert Lighthizer. At the same time, the official indicated that trade issues are unlikely to be part of the soon to be held two plus two dialogue between the two countries involving their respective foreign and defense ministers.
In the absence of the Secretary of State, the two-plus-two dialogue has now been delayed and is likely to be held later this year after Mike Pompeo is confirmed by the Senate. “I think, it’s an ongoing discussion that we’re having on the trade issues. The two plus two is focused a great deal on a defense security cooperation, diplomatic political cooperation just by virtue of the Defense Minister and Defense Secretary and the External Affairs Minister and Secretary of State. The trade issues are more of an ongoing dialogue that we’re having with India,” the official said.